A missed opportunity at the World Bank

I have no idea if Dartmouth president (and public health expert) Jim Yong Kim is a good choice to head the World Bank or not. I’m not an expert on economic development, and I’ve heard both good and bad things about him from a number of friends and colleagues since his nomination was announced. But ...

I have no idea if Dartmouth president (and public health expert) Jim Yong Kim is a good choice to head the World Bank or not. I’m not an expert on economic development, and I’ve heard both good and bad things about him from a number of friends and colleagues since his nomination was announced. But I am pretty sure that the Obama administration blew an opportunity to score some diplomatic points when they decided to push him for the job.

Here’s the key issue: Because voting shares in the World Bank are determined by each member nation’s contributions, the United States has a de facto veto over who gets to be Bank president. It’s the old Golden Rule of International Organization: Those with the gold make the rules. By long-standing custom, the president of the World Bank has always been an American, while a European gets to lead the International Monetary Fund.

Surprise, surprise: Other countries find this situation objectionable. And especially when the U.S. uses its prerogative to foist candidates with dubious qualifications on the institution, such as former Secretary of Defense Robert McNamara (who helped lead the U.S. to disaster in Vietnam) or former Deputy Defense Secretary Paul Wolfowitz (who did the same for us in Iraq).

Of course, realists expect powerful states to use international institutions to advance their own interests, which is why they want to make sure that the people in charge are reliable. If I were president, I would want the World Bank to be led by a highly competent individual who wasn’t about to harm U.S. interests. But a smart realist would also recognize that imposing the U.S. choice on others every single time is bound to trigger resentment, and encourage rising powers like China, Brazil, India, and others to redouble efforts to break Washington’s stranglehold. And every time the United States has to twist arms or use its privileged position to get its way, other states quietly seethe and anti-American forces are handed another nice talking point to use to undermine the U.S. image around the world.

Which is why I think the Obama administration missed a golden opportunity when it failed to embrace the nomination of Ngozi Okonjo-Iweala, the Nigerian Minister of Finance minister and former World Bank Managing Director. I can’t speak with authority about her qualifications, although she does have a B.A. from Harvard (magna cum laude) and a Ph.D. in regional economic development from MIT. I’m also struck by the endorsement she received from renowned trade economist Jagdish Bhagwati in a letter to the Financial Times, where he said that his own personal experience had convinced him that "she can outwit and outsmart almost any policy economist I know."

To be clear, I’m not arguing that Okonjo-Iweala is axiomatically a better choice than Kim, although she certainly appears to be equally (and maybe better) qualified. My point is about the diplomatic repercussions of this decision and the broader approach that the United States ought to be taking in world affairs. Given how powerful the United States still is, a primary goal of U.S. foreign policy should be to make America’s privileged position as palatable to others as possible. One way to do that is to make symbolic concessions on minor issues on occasion, in order to build good will and to convey a certain regard for others’s sensitivities. You know: a "decent respect for the opinions of mankind." So when Washington gets lucky and the African Union endorses a Nigerian economist with a B.A. from Harvard and a Ph.D. from MIT, who also has ample experience at the World Bank, and who is a woman of color to boot, the smart thing to do is get behind it immediately. This course is such an obvious no-brainer that I’m amazed the Obama administration didn’t leap at the opportunity.

And by the way, having a non-American as president of the World Bank wouldn’t set an unfortunate precedent. The United States would still have the voting rules in its favor, and it could still veto future candidates that it deemed unacceptable. But in this case the United States missed an opportunity to build some good will at little or no cost, and it’s going to come back to haunt us down the road. And woe unto us if Kim gets the job and turns out to be a dud.

Stephen M. Walt is the Robert and Renée Belfer professor of international relations at Harvard University.